Federal International (2000) Up 16%, Insiders Still Down After S$1.22m Purchase

Insiders who bought S$1.22m worth of Federal International (2000) Ltd (SGX:BDU) stock in the last year recovered part of their losses as the stock rose by 16% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at S$146k since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Federal International (2000)

Federal International (2000) Insider Transactions Over The Last Year

The insider Yafin Tan made the biggest insider purchase in the last 12 months. That single transaction was for S$1.2m worth of shares at a price of S$0.12 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being S$0.11). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Yafin Tan was the only individual insider to buy shares in the last twelve months.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Federal International (2000) is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Federal International (2000)

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Federal International (2000) insiders own about S$8.1m worth of shares (which is 53% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Federal International (2000) Insider Transactions Indicate?

The fact that there have been no Federal International (2000) insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Federal International (2000) insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Federal International (2000). For example - Federal International (2000) has 1 warning sign we think you should be aware of.

But note: Federal International (2000) may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.